Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

No, it’s not your imagination. The upper 1% really are screwing you more.

The Gini ratio measures income inequality. A Gini of zero would show perfect equality where everyone has the same income. A Gini of 100 (percent), would show maximum inequality, where only one person receives all the income.

Here is what has happened in the U.S.:

The above graph shows inequality in the U.S. has risen dramatically during the past 45 years.

Here is how we compare with other nations:

(From Wikipedia)

Income inequality in the U.S. is greater than all nations but Brazil, and essentially the same as Mexico and China.

Here’s a more complete view:

(Wikipedia)

The only nations with greater income inequality are shown in orange, red and brown.

Specific numbers for Europe are:

Not one European nation is as unequal as the United States.
.

Advice to the upper 1%
Ten suggestions about how to screw the lower 99% even more, and increase the income gap

1. Maintain or even increase the FICA tax. This tax directly punishes lower salaried people. Institute a national sales tax or VAT. Poorer people devote a greater percentage of their income on consumption.

2. To “save” Social Security, tell the 99% it’s insolvent, so you must reduce benefits and continue to increase the SS starting age. Also, continue to tax SS benefits, as these benefits are most important to lower income people.

3. To “save” Medicare, tell the 99% it’s insolvent, so you must reduce payments to doctors, hospitals and other health care providers. That way, more of the best doctors will opt for “boutique” practices that only the 1% can afford. Don’t pay for expensive procedures (that only the rich can manage).

4. Cut military spending. The military employs the 99%. Military equipment production companies provide jobs to the 99%. Keep cutting postal and other government employment. Also cut domestic spending, as the vast majority of domestic spending benefits the 99%.

5. “Broaden” the income tax base by increasing the number of lower income people forced to pay taxes. Continue the Alternative Minimum Tax (AMT); it catches more of the 99% every year, and the 1% know how to avoid it.

6. Cut federal spending to reduce “big government.” The reason: Most federal spending creates jobs for the 99%. Especially cut food stamps, unemployment compensation, Medicaid, aid to education, job training and all other federal aid programs. The upper 1% don’t use them.

7. Cut financial assistance to the states. Virtually everything the states do benefits the 99%, and since the states are monetarily non-sovereign, they only can get money by taxing their own people, tourism or exports. The rich know how to avoid taxes. Tourism and imports mostly are inter-state money transfers.

8. Continue to spread the myth that the U.S. government is, or soon will be insolvent, like Greece, and that federal taxes pay for federal spending. These ideas confuse the 99% and give you a good excuse to cut anything that benefits them. Continue the federal debt limit exercise. Pretend federal finances are the same as personal finances.

9. Continue to allow banks to trade for their own accounts, and always bail them out when their investments go sour. Never accuse any banker of criminal activity. Banks are special.

10. Nominate more arch conservatives to the Supreme Court. Scalia, Alito and Thomas are good models. The “Citizens United” decision was an excellent step forward in providing the rich with greater power.

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

You cattle can moo all you want. You don’t understand what’s going to happen to you, and no one is listening, anyway.

A plan that offers Obama a fighting chance
By Jonathan Rauch, Published: July 5, 2012

Obama should draw a map and send it to Capitol Hill in the form of a bill — a president’s strongest statement that he intends action. A big legislative proposal can frame the issue and paint Obama’s intentions in bold colors. It should include three elements:

1) Long-term fiscal retrenchment. The easiest and best way is to adopt the Simpson-Bowles deficit plan.

2) Short-term economic stimulus. Republicans will howl about more spending. Let them. Stimulus measures make sense when unemployment is high and the world is teetering on the edge of a second recession.

3) A two-year debt-limit extension. Declare that another debt-limit fiasco is unacceptable and demand that the issue be taken off the table. Let Republicans explain why they want to hold a gun to the economy’s head.

For those who may have tried to forget that ill-fated, ill-considered Simpson-Bowles plan, here is a summary from the New York Times:

—Deep cuts in domestic and military spending starting in 2012.
–Overhaul the tax code, eliminating or reducing the $1 trillion a year in popular tax breaks for individuals and corporations and using the revenues mostly to slash income tax rates but also to reduce deficits.
–To make Social Security solvent for 75 years, raise payroll taxes for the affluent and reduce future benefits, including by slowly raising the retirement age for full benefits to 69 from 67 by 2075.
—Reduce deficit spending by about $4 trillion over the coming decade.

So let’s add it all up. Mr. Rauch would adopt a plan that cuts federal spending, increases federal taxes and thereby, reduces federal deficits. It would take money out of the pockets of the poor and middle classes, not only by increasing FICA, but by reducing Social Security benefits.

But, Rauch also says (his words), “Stimulus measures make sense when unemployment is high and the world is teetering on the edge of a second recession.” Huh? Is this man daft?

How (and for that matter, why) does a nation simultaneously cut spending and increase taxes, while instituting economic stimulus? Shall we also give a left-arm transfusion to someone who has lost blood, while we drain blood from his right arm? Is this what passes for intelligence in today’s media?

Bottom line: Money is the lifeblood of our economy. GDP is a common measure of the economy. And:

GDP = Federal Spending + Private Consumption and Investment + Net Exports

So, for you media writers who do not understand algebra, to grow GDP, it’s necessary to increase Federal Spending and/or Private Consumption and Investment, or Net Exports.

But a tax increase reduces Private Consumption and Investment. And a spending cut reduces Federal Spending (as well as Private Consumption and Investment). And there is nothing mentioned about Net Exports.

Everything in Simpson-Bowles is designed to reduce GDP. That plan is just another name for “austerity,” which has destroyed the economies of Europe, and which presumably makes it attractive to American media.

Finally, as for the two-year debt-limit extension, any economist worth his salt will tell you the debt limit is obsolete, nonsensical, unnecessary and overall stupid. It effectively limits yesterday’s budgets (Think about that), and is meaningless for a government that became Monetarily Sovereign on August 15, 1971.

Sadly, the Jonathan Rauch’s of America (prime candidates for the flat-earth society) have the public’s ear. Voters do not realize what the media/political establishment is doing to them, in the name of the upper income 1%, and nobody with a voice is talking.

We voters are cows being pushed into the slaughter house. We go where we are prodded, mooing loudly and ignorantly, not understanding what awaits us, while the upper 1% just laughs.

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

This isn’t news to you. Readers of this blog know the American Association of Retired People (AARP) is a shill for the upper 1% income group.

But I continue to be impressed with the cleverness of their anti-99% message. They pretend to offer a helping hand, while the other hand stabs you in the back. Here’s an example.

According to AARP, Patricia Barry is a “Medicare expert.” Read this direct quote from the AARP website:

medicare expert
PATRICIA BARRY

Patricia Barry, senior editor of the AARP Bulletin and its online Ms. Medicare columnist, is a recognized authority on Medicare and Medicare Part D prescription drug coverage. She has written extensively about Medicare and other health care issues for consumers and is author of the book Medicare Prescription Drug Coverage For Dummies (Wiley, 2008).

They even provide a photo of Ms. Barry, a kindly, grandmotherly type.
Really, would this sweet, honest, “Mayberryesque” face ever lie to you?

At What’s in Store for Medicare? gentle Ms. Barry pretends to evaluate several plans meant to “save” Medicare.

She lists the pros and cons of each plan, but these pros and cons are a decoy. They are not the real message. The real message to AARP members is: Medicare will run out of money unless taxes are increased or benefits decreased.

That is the myth with which the upper 1% income group indoctrinates the lower 99%. The purpose: To spread the income gap between the two. The greater the gap, the greater the power the 1% has over the 99%.

In the guise of being helpful, AARP hides the fact that Medicare cannot run out of money unless Congress wants it to run out of money.

Here are a few excerpts from Ms. Barry’s article:

Changing the way Medicare pays for benefits: Under the Ryan plan — known as “premium support” to its proponents and as a “voucher system” to its critics — the government would allow you a certain sum of money to buy coverage from competing private plans or from a revised version of traditional Medicare.

This would put Medicare on a budget to hold down spending and reduce the tax burden on future generations.

Of course, no Medicare plan can “reduce the tax burden on future generations,” simply because there is no relationship between Medicare benefits and Medicare taxes. Medicare taxes could be zero, and Medicare still could continue as always — even increase benefits.

In a Monetarily Sovereign government like ours, federal taxes do not pay for federal spending. The government actually creates dollars by spending.

But the upper 1%, with AARP’s connivance, want you to believe the 99% must sacrifice for the sake of “future generations.” (Never mind that cutting benefits is guaranteed to burden future generations.)

And then there’s this:

Raising Medicare eligibility age to 67: Eligibility for Medicare has always been at age 65, except for younger people with disabilities. This proposal aims to gradually bring Medicare in line with Social Security, where full retirement age is now 66 and set to rise to 67 by 2027.

With more Americans living longer, and health spending on older people rising, we can’t afford Medicare at age 65.

Oh, kindly Ms. Barry, who is the “we” who can’t afford Medicare at age 65? Surely you don’t mean our federal government, which being Monetarily Sovereign, has the unlimited ability to create dollars.

And note the subtle message — “bring Medicare in line with Social Security.” See, it really isn’t a benefit reduction; it just brings Medicare “in line.” Doesn’t everyone want things to be “in line”?

Raising Medicare premiums for higher-income people: Most people pay monthly premiums for Part B, which covers doctors’ services and outpatient care, and for Part D prescription drug coverage. People with incomes over a certain level — those whose tax returns show a modified adjusted gross income of $85,000 for a single person or $170,000 for a married couple — pay higher premiums.

For: The easiest way to bring in more money for Medicare would be to raise the premiums even more for higher income people — so that the wealthiest older people pay the full cost and receive no taxpayer-funded subsidy. Another option is to lower the income level at which the higher premium charge kicks in, so that more people have to pay it.

By pretending the tax hits “wealthiest older people,” angelic Ms. Barry neglected to mention two details: Medicare taxes are paid against salaries, not against other forms of income. But for the 1%, salaries are a minor part of income. Raising the tax rate would affect salaried workers — the middle classes, while leaving the upper 1% largely unscathed.

And Medicare costs are a much larger percentage of the 99%’s income than of the upper 1%’s income. Any tax increase or benefit decrease hurts the 99% while barely being noticed by the 1%.

And, of course, there is no need to “bring in more money for Medicare.”

Changing medigap supplemental insurance: About one in six people with Medicare buys private supplemental insurance, also known as medigap. It covers some of their out-of-pocket expenses under traditional Medicare, such as the 20 percent copayments typically required for Part B services. This option would limit medigap coverage, requiring people to bear more out-of-pocket costs.

People buy medigap to limit their out-of-pocket spending in Medicare. But because they pay less, they tend to use more Medicare services, increasing the burden for taxpayers.

Ms. Barry suggests another clever way to cut Medicare benefits: Make benefits more expensive. Force people to pay more out of their own savings, a true burden on the 99%, though meaningless for the upper 1%.

Adding copays for some services: Medicare does not charge copays for home health care, the first 20 days in a skilled nursing facility — rehab after surgery, for example — or for laboratory services such as blood work and diagnostic tests. Several proposals would require copays for one or all of these.

Added copays would discourage unnecessary use of these services. Over 10 years, copays could save Medicare up to $40 billion for home health, $21 billion for stays in skilled nursing facilities and $16 billion for lab tests.

Subtle and clever, too — discourage “unnecessary” use. Of course, it would discourage necessary use, too, further burdening the 99%.

At no time has Ms. Barry or any voice of AARP expressed even the slightest skepticism about the need for increasing taxes or cutting benefits. Rather, by various “helpful” means, AARP spreads the myth that the 99% must sacrifice more.

This is what we see happening in Europe, with ever more future austerity being promoted as the solution to . . . well, to current austerity. Europe is the model for America’s 1%, where the middle- and lower-classes are being subjugated by the upper 1% class.

AARP, a private organization run by wealthy people, is a perfect propaganda arm for the upper 1%, in that it masquerades as an ally of the 99%. It’s like having your own grandma steal from your retirement plan, while she tells you how much she loves you.

Anyway, the real solution for Medicare is this: The federal government should eliminate FICA and provide free Medicare to every man, woman and child in America. Period.

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

France’s economy is in the toilet, but the French have a great plan to revive it.

France slaps 7 billion euros in taxes on rich and big firms
By Daniel Flynn | Reuters

PARIS (Reuters) – France’s new Socialist government announced tax rises worth 7.2 billion euros on Wednesday, including heavy one-off levies on wealthy households and big corporations, to plug a revenue shortfall this year caused by flagging economic growth.

In the first major raft of economic measures since Francois Hollande was elected president in May promising to avoid the painful austerity seen elsewhere in Europe, the government singled out large companies and the rich.

Translation: It works this way. We take 7.2 billion euros out of the economy to grow it. We would like to take 15 billion euros out of the economy, but that would grow it too much.

Hollande says the rich must pay their share as France battles to cut its public deficit from 5.2 percent of GDP last year to an EU limit of 3 percent in 2013 despite a stagnant economy and rising debt.

One of the highest state spending levels in the world has raised France’s debt by 800 billion euros in the last 10 years to 1.8 trillion – equivalent to 90 percent of GDP, the level at which economists say debt starts to hinder economic growth.

Translation: Government debt hinders economic growth by . . . well, we don’t know how. We just picked that 90% figure out of the air. We do know that:

GDP = Government Spending + Private Investment and Consumption + Net exports

So if we cut anything on the right hand side of the equation, GDP will fall, unless something else on the right hand side rises.

But increasing taxes reduces Private Investment and Consumption, so what’s left to grow GDP? We have no idea. What do you expect? We’re mainstream economists. We have no time for algebra.

Budget Minister Jerome Cahuzac said that, while the initial focus this year was on tax rises for the wealthy, the government would progressively rein in its expenditure from 2013 onwards.

Translation: We’ll cut Government Spending, Private Investment and Private Consumption. That’s how we’ll increase GDP. Fortunately, our citizens don’t understand algebra any better than we do. Hey, you Americans have nothing to laugh about. Your politicians want to do the same.

Having promised to freeze central government spending without cutting staffing levels, Hollande will now face the difficult task of convincing France’s powerful public sector unions to accept a cap on pay rises and promotions.

“I think the unions accept this idea of rigor,” Civil Service Minister Marylise Lebranchu told RTL radio, insisting that the measures would not amount to draconian austerity.”

Translation: Just because we plan to starve France of money, don’t you dare call it “austerity.” We now call it “rigor.”

Prime Minister Jean-Marc Ayrault on Tuesday slashed this year’s official GDP growth forecast to 0.3 percent from a previous estimate of 0.7 percent, and to 1.2 percent in 2013 from 1.75 percent previously.

Translation: Please don’t ask how I got those numbers, as I have no idea. They asked me for numbers, so I gave them numbers.

The Medef employers union has already said that measures such as a new 3 percent tax to be paid by companies on dividends distributed to shareholders would strangle already weak profit margins. The Socialists say this levy is aimed at encouraging firms to use their cash flow for capital investment.

Translation: Here’s how you build an economy: First you fine companies for paying dividends, then you increase taxes on profits. Anyway, people who receive dividends don’t buy goods and services to grow the economy, do they?

“We are sorry to see an increase in corporate taxes at a time when they need to be lowered, as the only way to make our economy more competitive,” said Medef chief Laurence Parisot.

“It is completely false to say that the tax increases will just hit the rich,” said Gilles Carrez, president of the National Assembly’s finance commission. “The bulk of the new taxes will hit the middle class and today we have the proof.”

Translation: As everyone knows, increasing taxes makes business grow and actually helps the middle class find jobs and be given raises. The European Union told us so.

————————————————————————————————————————————————————————–

Prediction: The EU will do everything possible to avoid doing the right thing: (They should give, not lend, euros to the euro nations.) When even Germany joins the PIIGS in suffering from austerity (aka “rigor”), the EU at long last, may find its path.

Or better yet, the French should re-adopt the franc.

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY